Elections Don't Matter, Institutions Do

By Robert D. Kaplan

Many years ago, I visited Four Corners in the American Southwest. This is a small stone monument on a polished metal platform where four states meet. You can walk around the monument in the space of a few seconds and stand in four states: Arizona, New Mexico, Colorado and Utah. People lined up to do this and have their pictures taken by excited relatives. To walk around the monument is indeed a thrill, because each of these four states has a richly developed tradition and identity that gives these borders real meaning. And yet no passports or customs police are required to go from one state to the other.

Well, of course that's true, they're only states, not countries, you might say. But the fact that my observation is a dull commonplace doesn't make it any less amazing. To be sure, it makes it more amazing. For as the late Harvard Professor Samuel P. Huntington once remarked, the genius of the American system lies less in its democracy per se than in its institutions. The federal and state system featuring 50 separate identities and bureaucracies, each with definitive land borders -- that nevertheless do not conflict with each other -- is unique in political history. And this is not to mention the thousands of counties and municipalities in America with their own sovereign jurisdictions. Many of the countries I have covered as a reporter in the troubled and war-torn developing world would be envious of such an original institutional arrangement for governing an entire continent.

In fact, Huntington's observation can be expanded further: The genius of Western civilization in general is that of institutions. Sure, democracy is a basis for this; but democracy is, nevertheless, a separate factor. For enlightened dictatorships in Asia have built robust, meritocratic institutions whereas weak democracies in Africa have not.

Institutions are such a mundane element of Western civilization that we tend to take them for granted. But as I've indicated, in many places I have worked and lived, that is not the case. Getting a permit or a simple document is not a matter of waiting in line for a few minutes, but of paying bribes and employing fixers. We take our running water and dependable electric current for granted, but those are amenities missing from many countries and regions because of the lack of competent institutions to manage such infrastructure. Having a friend or a relative working in the IRS is not going to save you from paying taxes, but such a situation is a rarity elsewhere. Successful institutions treat everyone equally and impersonally. This is not the case in Russia or Pakistan or Nigeria.

Of course, Americans may complain about poor rail service and deteriorating infrastructure and bureaucracies, especially in inner cities, but it is important to realize that we are, nevertheless, complaining on the basis of a very high standard relative to much of the developing world.

Institutions, or the lack of them, explain much that has happened in the world in recent decades. Following the collapse of the Berlin Wall, Central Europe went on to build functioning democracies and economies. With all of their problems and challenges, the Baltic states, Poland, the Czech Republic, Slovakia and Hungary have not fared badly and in some cases have been rousing success stories. This is because these societies boast high literacy rates among both men and women and have a tradition of modern bourgeois culture prior to World War II and communism. And it is literacy and middle class culture that are the building blocks of successful institutions. Institutions after all require bureaucrats, who must, in turn, be literate and familiar with the impersonal workings of modern organizations.

The Balkans have been less fortunate, with bad government and unimpressive growth the fare in Romania since 1989, semi-chaos rearing its head in Albania and Bulgaria, and inter-ethnic war destroying the Yugoslav federation in the 1990s. Here, too, a history of lower literacy rates, weak or in some cases non-existent middle classes, and an Eastern Orthodox faith that, because it is more contemplative it does not encourage impersonal standards, at least to the degree of Protestantism or even Catholicism, have all been factors in a weaker institutional basis for economic growth and political stability. Russia, too, fits into this category. Its system of oligarchs is a telltale sign of weak institutions, since corruption merely indicates an alternative pathway to getting things done when laws and the state bureaucracies are inadequately developed.

Then there is the greater Middle East. The so-called Arab Spring failed because the Arab world was not like Central and Eastern Europe. It had low literacy, especially among women. It had little or no tradition of a modern bourgeois, despite commercial classes in some cities, and so no usable institutions to fall back upon once dictatorships crumbled. Thus, what was left in North Africa and the Levant after authoritarianism was tribes and sects; unlike the post-communist civil society that encouraged stability in Central Europe. Turkey and Iran, as real states with more successful urbanization and higher literacy rates, are in an intermediate category between southern Europe and the Arab world. Obviously, even within the Arab world there are distinctions. Egyptian state institutions are a reality to a degree that those in Syria and Iraq are not. Egypt is governable, therefore, if momentarily by autocratic means, whereas Syria and Iraq seem not to be.

Finally, there is Africa. In many African countries, when taking a road out of the capital, very soon the state itself vanishes. The road becomes a vague dirt track, and the domains of tribes and warlords take over. This is a world where, because literacy and middle classes are minimal (albeit growing), institutions still barely exist. The way to gauge development in Africa is not to interview civil society types in the capitals, but to go to the ministries and other bureaucracies and wait in line and see how things work -- and if they do.

Indeed, people lie to themselves and then lie to journalists and ambassadors. So don't listen to what people (especially elites) say; watch how they behave. Do they pay taxes? Where do they stash their money? Do they wait in line to get drivers' permits, and so forth? It is behavior, not rhetoric, that indicates the existence of institutions, or lack thereof.

Elections are easy to hold and indicate less than journalists and political scientists think. An election is a 24- or 48-hour affair, organized often with the help of foreign observers. But a well-oiled ministry must function 365 days a year. Lee Kuan Yew is one of the great men of the 20th century because he built institutions and, therefore, a state in Singapore. For without basic order there can be no meaningful freedom. And institutions are the foremost tools of order.

Because institutions develop slowly and organically, even under the best of circumstances, their growth eludes journalists who are interested in dramatic events. Thus, media stories often provide a poor indication of the prospects of a particular country. The lesson for businesspeople and intelligence forecasters is: Track institutions, not personalities.

Elections Don't Matter, Institutions Do is republished with permission of Stratfor

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Ferocious, Weak and Crazy: The North Korean Strategy

By George Friedman

North Korea's state-run media reported Sunday that North Korean leader Kim Jong Un has ordered the country's top security officials to take "substantial and high-profile important state measures," which has been widely interpreted to mean that North Korea is planning its third nuclear test. Kim said the orders were retaliation for the U.S.-led push to tighten U.N. sanctions on Pyongyang following North Korea's missile test in October. A few days before Kim's statement emerged, the North Koreans said future tests would target the United States, which North Korea regards as its key adversary along with Washington's tool, South Korea.

North Korea has been using the threat of tests and the tests themselves as weapons against its neighbors and the United States for years. On the surface, threatening to test weapons does not appear particularly sensible. If the test fails, you look weak. If it succeeds, you look dangerous without actually having a deliverable weapon. And the closer you come to having a weapon, the more likely someone is to attack you so you don't succeed in actually getting one. Developing a weapon in absolute secret would seem to make more sense. When the weapon is ready, you display it, and you have something solid to threaten enemies with.

North Korea, of course, has been doing this for years and doing it successfully, so what appears absurd on the surface quite obviously isn't. On the contrary, it has proved to be a very effective maneuver. North Korea is estimated to have a gross domestic product of about $28 billion, about the same as Latvia or Turkmenistan. Yet it has maneuvered itself into a situation where the United States, Japan, China, Russia and South Korea have sat down with it at the negotiating table in a bid to persuade it not to build weapons. Sometimes, the great powers give North Korea money and food to persuade it not to develop weapons. It sometimes agrees to a halt, but then resumes its nuclear activities. It never completes a weapon, but it frequently threatens to test one. And when it carries out such tests, it claims its tests are directed at the United States and South Korea, as if the test itself were a threat.

There is brilliance in North Korea's strategy. When the Soviet Union collapsed, North Korea was left in dire economic straits. There were reasonable expectations that its government would soon collapse, leading to the unification of the Korean Peninsula. Naturally, the goal of the North Korean government was regime survival, so it was terrified that outside powers would invade or support an uprising against it. It needed a strategy that would dissuade anyone from trying that. Being weak in every sense, this wasn't going to be easy, but the North Koreans developed a strategy that we described more than 10 years ago as ferocious, weak and crazy. North Korea has pursued this course since the 1990s, and the latest manifestation of this strategy was on display last week. The strategy has worked marvelously and is still working.

A Three-Part Strategy

First, the North Koreans positioned themselves as ferocious by appearing to have, or to be on the verge of having, devastating power. Second, they positioned themselves as being weak such that no matter how ferocious they are, there would be no point in pushing them because they are going to collapse anyway. And third, they positioned themselves as crazy, meaning pushing them would be dangerous since they were liable to engage in the greatest risks imaginable at the slightest provocation.

In the beginning, Pyongyang's ability to appear ferocious was limited to the North Korean army's power to shell Seoul. It had massed artillery along the border and could theoretically devastate the southern capital, assuming the North had enough ammunition, its artillery worked and air power didn't lay waste to its massed artillery. The point was not that it was going to level Seoul but that it had the ability to do so. There were benefits to outsiders in destabilizing the northern regime, but Pyongyang's ferocity -- uncertain though its capabilities were -- was enough to dissuade South Korea and its allies from trying to undermine the regime. Its later move to develop missiles and nuclear weapons followed from the strategy of ferocity -- since nothing was worth a nuclear war, enraging the regime by trying to undermine it wasn't worth the risk.

Many nations have tried to play the ferocity game, but the North Koreans added a brilliant and subtle twist to it: being weak. The North Koreans advertised the weakness of their economy, particularly its food insecurity, by various means. This was not done overtly, but by allowing glimpses of its weakness. Given the weakness of its economy and the difficulty of life in North Korea, there was no need to risk trying to undermine the North. It would collapse from its own defects.

This was a double inoculation. The North Koreans' ferocity with weapons whose effectiveness might be questionable, but still pose an unquantifiable threat, caused its enemies to tread carefully. Why risk unleashing its ferocity when its weakness would bring it down? Indeed, a constant debate among Western analysts over the North's power versus its weakness combines to paralyze policymakers.

The North Koreans added a third layer to perfect all of this. They portrayed themselves as crazy, working to appear unpredictable, given to extravagant threats and seeming to welcome a war. Sometimes, they reaffirmed they were crazy via steps like sinking South Korean ships for no apparent reason. As in poker, so with the North: You can play against many sorts of players, from those who truly understand the odds to those who are just playing for fun, but never, ever play poker against a nut. He is totally unpredictable, can't be gamed, and if you play with his head you don't know what will happen.  

So long as the North Koreans remained ferocious, weak and crazy, the best thing to do was not irritate them too much and not to worry what kind of government they had. But being weak and crazy was the easy part for the North; maintaining its appearance of ferocity was more challenging. Not only did the North Koreans have to keep increasing their ferocity, they had to avoid increasing it so much that it overpowered the deterrent effect of their weakness and craziness.  

A Cautious Nuclear Program

Hence, we have North Korea's eternal nuclear program. It never quite produces a weapon, but no one can be sure whether a weapon might be produced. Due to widespread perceptions that the North Koreans are crazy, it is widely believed they might rush to complete their weapon and go to war at the slightest provocation. The result is the United States, Russia, China, Japan and South Korea holding meetings with North Korea to try to persuade it not to do something crazy.

Interestingly, North Korea never does anything significant and dangerous, or at least not dangerous enough to break the pattern. Since the Korean War, North Korea has carefully calculated its actions, timing them to avoid any move that could force a major reaction. We see this caution built into its nuclear program. After more than a decade of very public ferocity, the North Koreans have not come close to a deliverable weapon. But since if you upset them, they just might, the best bet has been to tread lightly and see if you can gently persuade them not to do something insane.

The North's positioning is superb: Minimal risky action sufficient to lend credibility to its ferocity and craziness plus endless rhetorical threats maneuvers North Korea into being a major global threat in the eyes of the great powers. Having won themselves this position, the North Koreans are not about to risk it, even if a 20-something leader is hurling threats.

The China Angle and the Iranian Pupil

There is, however, a somewhat more interesting dimension emerging. Over the years, the United States, Japan and South Korea have looked to the Chinese to intercede and persuade the North Koreans not to do anything rash. This diplomatic pattern has established itself so firmly that we wonder what the actual Chinese role is in all this. China is currently engaged in territorial disputes with U.S. allies in the South and East China seas. Whether anyone would or could go to war over islands in these waters is dubious, but the situation is still worth noting.

The Chinese and the Japanese have been particularly hostile toward one another in recent weeks in terms of rhetoric and moving their ships around. A crisis in North Korea, particularly one in which the North tested a nuclear weapon, would inevitably initiate the diplomatic dance whereby the Americans and Japanese ask the Chinese to intercede with the North Koreans. The Chinese would oblige. This is not a great effort for them, since having detonated a nuclear device, the North isn't interested in doing much more. In fact, Pyongyang will be drawing on the test's proverbial fallout for some time. The Chinese are calling in no chits with the North Koreans, and the Americans and Japanese -- terribly afraid of what the ferocious, weak, crazy North Koreans will do next -- will be grateful to China for defusing the "crisis." And who could be so churlish as to raise issues on trade or minor islands when China has used its power to force North Korea to step down?

It is impossible for us to know what the Chinese are thinking, and we have no overt basis for assuming the Chinese and North Koreans are collaborating, but we do note that China has taken an increasing interest in stabilizing North Korea. For its part, North Korea has tended to stage these crises -- and their subsequent Chinese interventions -- at quite useful times for Beijing.

It should also be noted that other countries have learned the ferocious, weak, crazy maneuver from North Korea. Iran is the best pupil. It has convincingly portrayed itself as ferocious via its nuclear program, endlessly and quite publicly pursuing its program without ever quite succeeding. It is also persistently seen as weak, perpetually facing economic crises and wrathful mobs of iPod-wielding youths. Whether Iran can play the weakness card as skillfully as North Korea remains unclear -- Iran just doesn't have the famines North Korea has.

Additionally, Iran's rhetoric at times can certainly be considered crazy: Tehran has carefully cultivated perceptions that it would wage nuclear war even if this meant the death of all Iranians. Like North Korea, Iran also has managed to retain its form of government and its national sovereignty. Endless predictions of the fall of the Islamic republic to a rising generation have proved false.

I do not mean to appear to be criticizing the "ferocious, weak and crazy" strategy. When you are playing a weak hand, such a strategy can yield demonstrable benefits. It preserves regimes, centers one as a major international player and can wring concessions out of major powers. It can be pushed too far, however, when the fear of ferocity and craziness undermines the solace your opponents find in your weakness.

Diplomacy is the art of nations achieving their ends without resorting to war. It is particularly important for small, isolated nations to survive without going to war. As in many things, the paradox of appearing willing to go to war in spite of all rational calculations can be the foundation for avoiding war. It is a sound strategy, and for North Korea and Iran, for the time being at least, it has worked

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Israel's Water Challenge

Filters at the Ashkelon seawater reverse osmosis plant south of Tel Aviv in 2008. (DAVID BUIMOVITCH/AFP/Getty Images)

Summary

Israel's successful efforts to increase water security will lessen one of the country's geographical constraints. But new sources of water are more energy intensive, and this could increase Israel's short-term dependence on energy imports unless domestic energy sources are successfully developed.

Analysis

While Israel enjoys relative national security compared to its neighbors, which are struggling with internal fragmentation, this will probably change eventually. Because concerted military efforts have been required in the past to secure water resources, Israel has had a strong incentive to develop technological solutions to improve water security. Additional domestic water resources -- including increasing desalination capacity and continued efforts to recycle water -- allow Israel to mitigate one of its inherent geographic constraints.

Israel has substantially increased its capacity to desalinize water over the last decade. The arid country of roughly 8 million already has a number of desalination plants -- including the Sorek plant, the world's largest desalination plant of its kind, which became fully operational in October. Israel has plans to increase total desalination capacity through 2020 such that it approaches the estimated annual amount of internally generated natural water resources.

Naturally Occurring Water

Israel's total annual internal renewable natural sources of fresh water stand at 0.75 billion cubic meters. It has roughly 265 cubic meters per year of water per person available. This is well below the U.N. definition of water poverty, which is anything below 1,000 cubic meters per person per year.

For groundwater, Israel relies on two main aquifers: the Coastal Aquifer and the Mountain Aquifer (which is further divided into subaquifers). Both also lie under the Palestinian territory -- in Gaza and the West Bank, respectively. 

Israel's surface water is concentrated mainly in the north and east of the country. Israel is part of the Jordan River system, which also includes Syria, Lebanon, Jordan and the West Bank. The major rivers in the upper part of the basin include the Hasbani, Banias and the Dan rivers. These rivers converge to form the Jordan River near the border of Israel, Lebanon and Syria before flowing into the Sea of Galilee. Downstream, the Jordan River is further fed by the major tributaries of the Yarmouk and Zarqa rivers.

Crucially, more than half of Israel's total natural water originates outside its borders: 310 million cubic meters come from Lebanon, 375 million cubic meters come from Syria and 345 million cubic meters originate in the West Bank. All the countries in this arid region compete for the limited resources of the basin. The Palestinian Authority has between 51 cubic meters per person and 333 cubic meters per person per year depending on location, while Syria and Lebanon receive water from additional river systems and operate at 882 cubic meters per year per person and 1,259 cubic meters per year per person, respectively. Jordan has 161 cubic meters per year per person.

Allocations of water from transboundary river systems are often disputed. The last basin-wide allocation scheme for the Jordan River system came in 1955 with the Jordan Valley Unified Water Plan (also known as the Johnston Plan, named after the American ambassador involved in negotiations). By allocating water based primarily on agricultural demand, the plan offered a compromise between participating nations. However, because many of the Arab states did not want to recognize Israel, the plan was never ratified. Attitudes toward cooperative distribution strategies continued to sour during the construction of Israel's National Water Carrier, which diverted water from the Sea of Galilee to other points in Israel. However, Jordan and Israel have used the Unified Plan as the basis for subsequent negotiations. 

As one of the downstream riparian nations in the basin, protecting Israel's northern borders is essential to maintaining control of surface water resources. Maintaining control of the Golan Heights not only gives Israel a military advantage in dealing with adversaries to the north, it also helps to guarantee access to the Sea of Galilee.

Israel historically has demonstrated a willingness to use military force to guarantee access to water resources. In 1964, Syria, with the support of the Arab League, began devising plans to divert the Banias River, threatening roughly 10 percent of Israel's water supply at the time. From 1965-1967, Israel launched attacks to destroy the diversion projects under construction in an effort to maintain access to the water source.

Water rights and distribution parameters were included in the 1994 peace treaty between Israel and Jordan. The Oslo II agreement in 1995 between Israel and the Palestinian National Authority also outlined parameters for water cooperation in the West Bank, but in practice, joint management has often failed and the Palestinian population remains heavily dependent on Israel for access to water. 

These treaties also did not remove Israel's imperative to ensure continued access to water resources, nor its willingness to threaten military action to ensure it. In 2002, villages in southern Lebanon installed small pumping stations and irrigation pipelines on the Hasbani River. Ariel Sharon, Israeli prime minister at the time, claimed these actions constituted a "case for war" and threated military action. While no action was taken, the posturing illustrates Israel's wariness of upstream water management schemes. 

Expanding Sources of Water: Conservation and Desalination

The foundations of Israel's current water infrastructure system were laid in the 1950s and 1960s, when Israel faced a more volatile security situation. Subsequent decades saw further development of the efficient use of water and the development of alternative sources. As a result, Israel has expanded internal water resources without expanding its physical borders, helping mitigate the risk of international confrontations over water.

To the same end, Israel has also developed a highly organized water management system, effectively integrating the whole country. An early project known as the National Water Carrier, which comprises a series of canals, pipelines and pumping stations, moves water from the Sea of Galilee in the comparatively water-rich north to areas of higher demand and greater need in the central and southern zones. 

Israel is also a pioneer and global leader in water-efficient irrigation technology. Because agriculture remains the largest water consumer in the country, efficient use in this sector is necessary for continued sustainable water management. In addition to the irrigation technology, by effectively treating roughly 400 million cubic meters of wastewater, using it mostly to irrigate crops, Israel further reduces pressure on water resources.

Although Israel has used desalination technology on a smaller scale since the 1960s, the push for a substantial increase in desalination capacity began only after a major drought in 1998-1999. Several droughts over the course of the last 15 years drove home the vulnerability of Israel's water supply. Meanwhile, the overuse of groundwater resources, especially of the Coastal Aquifer, is degrading the quality of the water.

Israel currently consumes just under 2 billion cubic meters of water per year, and while water management has the ability to improve the efficiency of water usage, increasing populations in the region will continue to pressure these limited resources. These factors combined have pushed Israel toward desalination.

When the Sorek plant became fully operational in October, Israel gained 150 million cubic meters per year of desalination capacity. Total seawater desalination capacity is expected to reach 600 million cubic meters per year by 2015 and could reach 750 million cubic meters per year by 2020. The production cost of desalinized water depends on the plant, but averages $0.65 per cubic meter, with the new Sorek plant costing roughly $0.50 per cubic meter. This is compared to $0.15-$0.45 for water from natural sources. Advances in the technology that Israel uses, including technologies that improve the energy efficiency of the plants, have helped drive the costs down compared to previous desalination technology. But desalinated water remains far more energy-intensive than naturally sourced water, and it increases demands for power on the national electricity grid and from independent natural gas generators.

Short-Term Dependence on Imported Energy

Because Israel has traditionally been an energy importer, increasing reliance on an energy-intensive water resource could in turn increase Israel's dependence on energy-exporting nations. Natural gas will likely be the predominant fuel used to produce desalinated water. The Israeli electrical grid is projected to shift further toward natural gas and away from coal in the coming years, while the desalination plants often independently employ natural gas generators.

The total fuel required will vary based both on the type of desalination plant, as well as the type of power generation. Even with newer, more efficient equipment, the operation of more than 500 million cubic meters of desalination capacity could require more than 100 million cubic meters of natural gas or the equivalent energy from some other fuel sources to produce the additional power necessary to run the plants.  

Israel had previously been an importer of natural gas, but the total volume of imports has declined in recent years. As of August 2013, imports were only accounting for 13 percent of total consumption. Furthermore, offshore discoveries in the eastern Mediterranean, including the Leviathan fields projected to come online as early as 2016, mean Israel has the potential to become a natural gas exporter. While there are many political and technical constraints surrounding the development and subsequent use of these fields, increased levels of domestic energy production could reduce dependence on foreign partners in terms of energy. This is especially important as Israel pursues a strategy of relying on more energy-intensive water resources.

Outlook

Israel traditionally requires a third-party sponsor to survive. And even with the added desalination capacity, Israel may still need to use water from external sources. But it has successfully adjusted to the environment and better insulated itself from its neighbors, complementing an established military superiority. And this could provide additional maneuverability in future negotiations.

Israel is momentarily in a secure strategic position. Syria will likely remain in a state of civil war for an extended period, and Lebanon remains fragile and fragmented. Israel maintains a working relationship with other neighbors, such as the Hashemite regime in Jordan, as well as Fatah and the Palestinian National Authority and the Egyptian military. This status quo seems unlikely to change in the short term. But although Israel is in a relatively stable position, it knows how mercurial the surrounding region is and will likely still behave proactively around national security issues.

Israel's proactive solution to ensuring water security is to develop additional domestic resources. Though this will require more imported energy in the short term, the continued development of domestic energy resources could act as a counter-balance, even as water resources become more energy-intensive.



Israel's Water Challenge is republished with permission of Stratfor

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